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(Sharecast News) - Basic resources stocks weighed heavily on London's FTSE 100, as prices of copper and especially oil tumbled.
Oil prices took another large leg lower, dropping around 6% to levels not seen for over a year, at one point pushing the FTSE 100 back below the 6,930 level it closed at on 31 December 1999, outstripping its European peers as 17% of the UK benchmark is made up by Shell and BP.
"Oil and mining shares are under pressure amid worries over the strength of global demand, which sits under the shadow of Trump's trade war, while at the same time there are concerns of oversupply in the oil market," said Laith Khalaf at Hargreaves Lansdown.
He added: "A falling oil price partly reflects perceived weakness in the global economy, though it acts as a self-correcting mechanism, as it makes lots of economic activity cheaper, and therefore more attractive. For instance, a lower oil price will relieve pressure on UK consumers by halting the rise in fuel and heating costs we have seen in recent months. It thereby acts as a dampener on inflation, and a boost to discretionary spending."
Copper prices were also down US$6,201 per tonne versus US$6,254 tonne the day before.
Copper concentrate terms have fallen for Antofagasta concentrates from the Los Pleambres copper mine which produces good quality concentrates, noted broker SP Angel.
The pullback in [treatment charge and refining charge] costs is symptomatic of the addition of copper smelting capacity in China and is despite the sudden and unexpected long-term closure of Vedanta's giant Tutacorin smelter in India."
Overall in the commodities space, analysts at Sucden Financial noted that base metals were also trading a tad lower but with few fresh features and spread rates broadly similar to the day before. "Today saw subdued and routine trading largely due to the US Thanksgiving holiday with major equity markets remaining under pressure."
Top performing sectors so far today
Mobile Telecommunications 3,449.13 +2.02%
Technology Hardware & Equipment 973.28 +1.98%
Tobacco 32,356.64 +1.88%
Construction & Materials 5,344.12 +1.64%
Software & Computer Services 1,762.99 +1.62%
Bottom performing sectors so far today
Oil Equipment, Services & Distribution 11,820.57 -5.52%
Industrial Metals & Mining 4,389.13 -4.41%
Mining 16,177.50 -3.64%
Oil & Gas Producers 8,485.12 -3.56%
Industrial Engineering 10,573.31 -1.21%
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